From Overruns to Readiness: A New Era of UK Infrastructure Governance?

A Year of Change in Infrastructure Delivery

One year since Kaleido’s launch, the UK’s approach to infrastructure governance has shifted dramatically. In the past 12 months, government and industry are set to embrace reforms aimed at tackling the chronic issues that plagued mega-projects, from cost overruns to stalled delivery. These changes set a more hopeful stage for major infrastructure delivery. They include a stronger emphasis on thorough feasibility phases, new governance and budgeting rules for large projects, and alignment with a decade-long infrastructure strategy. This is a timely recognition of the immense scale of the Government Major Projects Portfolio (GMPP), now reaching £1 trillion in Whole-Life Costs of planned investments.

Prolonged Feasibility with Longer ‘Front-End’ Planning

One of the most consequential shifts has been HM Treasury’s endorsement of longer and more robust Front-End Engineering Design (FEED) and feasibility phases for mega-projects (defined as projects exceeding £10bn). This reflects a clear lesson from past failures: too often, projects moved to construction with immature designs and overly optimistic budgets - a problem discussed in Kaleido's first blog <link>. Now, departments must complete feasibility studies at a project’s outset, and the Treasury will fund this early stage to scope and firm up plans. Crucially, no project will receive full delivery funding until a final investment decision confirms it is ready to proceed, a decision now reserved for the highest levels (Prime Minister, Chancellor, and relevant Secretary of State). By front-loading effort into planning and design, the government aims to “set projects up for success” and avoid premature commitments. This extended FEED stage ensures that cost estimates and schedules start as ranges reflecting uncertainty, narrowing only as evidence solidifies. The result should be more realistic budgets and timelines, with fewer nasty surprises once shovels hit the ground.

Strengthening Governance: OVfM Recommendations in Action

In tandem with longer planning phases, the government has changed how mega-projects are governed and overseen, acting on a landmark report by the Office for Value for Money (OVfM). HM Treasury has accepted and is implementing the OVfM recommendations on governance and budgeting for mega-projects. These measures introduce clearer accountability and more disciplined decision-making for the nation’s most significant and complex projects. A cornerstone of the reform is the introduction of a Strategy and Delivery Plan for each mega-project, to be presented to Parliament at project launch and updated at key milestones. This ensures all stakeholders share a unified vision of what the project aims to achieve and how it will be delivered, preventing the drift in scope or objectives that often undermined past efforts.

Equally important, oversight is being streamlined. Senior Responsible Owners (SROs) will agree on bespoke decision-making and assurance arrangements with central authorities to eliminate the maze of “multiple layers of review” that used to delay progress. Integrated assurance plans mean independent experts vet cost and schedule estimates, giving ministers confidence that decisions are based on sound evidence. By sharpening governance in this way, problems should be spotted earlier and addressed faster, before they escalate. Overall, these changes push government to take greater responsibility and accountability for delivering on its big projects – a cultural shift that has been long awaited and widely welcomed.

Staged Investment and Fixed Budgets for Mega-Projects

Another transformative change is how mega-projects are funded through their lifecycle. The old approach of locking in a single big budget at the start (often based on low readiness data), in its place is staged, incremental funding tied to project maturity. Under the new model, mega-projects will proceed through gated development phases, with funding released step-by-step only when predefined criteria are met at each stage gate. This staged funding ensures that projects “only proceed when they are ready”, as additional investment isn’t approved until the project proves its readiness to move forward. It also forces truly hard decisions at stage gates (to continue, modify, or even halt a project) based on robust evidence, rather than letting projects drift on inertia.

Once a project does earn its Final Investment Decision (FID) and moves into delivery, the government will enforce a fixed capital envelope (budget) for its construction phase. This means a firm cap on the project’s cost, including contingency, is set by the Prime Minister, Chancellor, and relevant minister at the point of approval. Within this envelope, however, there is new flexibility: projects can move money between years (with Treasury approval) to manage risks or accelerate work as needed. By relaxing rigid annual budgeting, this flexibility lets delivery agencies mitigate delays or cost pressures smartly. For example, “buying out risk” by accelerating critical work when opportunities arise. If, despite these measures, costs threaten to exceed the fixed envelope (even after using contingency), a “fundamental reset” is triggered. At that point, leaders at the top of government must reconsider scope, funding, or feasibility afresh. Together, incremental development funding and post-FID budget discipline aim to prevent the common syndrome of major overruns – by funding only what’s justified and capping commitments to keep projects within realistic bounds.

Aligning with the 10-Year Infrastructure Strategy

These governance and funding reforms are not happening in isolation, but form part of a broader strategic reset in UK infrastructure planning. In June 2025, HM Treasury published “UK Infrastructure: A 10 Year Strategy,” a cross-government infrastructure plan spanning the next decade. This long-term strategy responds to years of erratic, stop-start investment by providing a stable pipeline of priority projects and a clear roadmap for delivery. It covers not only economic infrastructure like transport and energy, but also social infrastructure (hospitals, schools, housing, etc) reflecting a holistic view of national needs. Crucially, the strategy is backed by significant funding to turn its plans into reality.

To support this strategic vision, the government has established a dynamic Infrastructure Pipeline of upcoming projects. This pipeline, updated regularly, lists some 780 planned projects across public and private sectors to give industry and investors visibility on what’s coming. The intent is to enable construction firms, suppliers, and financiers to plan ahead, invest in skills and capacity, and ultimately drive down costs through a steadier workflow.

The creation of the National Infrastructure and Service Transformation Authority (NISTA), through a merger of the Infrastructure & Projects Authority and the National Infrastructure Commission, embodies this joined-up approach. NISTA sits at the center of strategy and delivery, overseeing the new system (including the GMPP and the pipeline) to keep projects on track and strategic objectives in focus. All told, the 10-Year Infrastructure Strategy provides the long-term “north star” by which individual projects are evaluated and guided, marking a shift from reactive project-by-project thinking to proactive portfolio management.

The £1 Trillion Portfolio: Scale of the Challenge and Opportunity

The urgency behind these reforms becomes clear when considering the sheer scale of the Government Major Projects Portfolio (GMPP) today. The GMPP is a collection of the central government’s biggest and most complex projects, and grown to encompass over 200 projects with a combined Whole-Life Cost approaching £1 trillion. To put this in perspective, that is roughly half the UK’s annual GDP committed across projects ranging from high-speed rail lines and nuclear power stations to defense systems and digital transformations. As of March 2025, 213 active projects were in the portfolio, together valued at about £996 billion in total costs. This figure has likely crossed the trillion-pound mark as new projects enter and cost estimates are updated. Such a vast undertaking highlights why governance cannot remain business-as-usual, as even minor percentage inefficiencies translate into tens of billions of pounds.

The composition of this £1tn+ portfolio is also revealing. It includes truly “mega” projects – those over £10 billion each – like High Speed 2 (HS2), the Sizewell C nuclear plant, and the Dreadnought submarine program. But it also features hundreds of “major” projects that, while smaller, are still highly complex and critical (e.g. large hospital builds, regional transport schemes, national digital systems). Together, they span 21 government departments and numerous public agencies. Managing this portfolio at scale demands new tools and approaches: hence the emphasis on integrated assurance, data-driven oversight, and talent development under NISTA’s leadership. With the portfolio’s Whole-Life Cost surging (up from £834 billion for 227 projects in 2024 and £805 billion for 244 projects in 2023), expectations are higher than ever that every pound delivers value for money. The reforms – from fixed budgets to rigorous front-end planning – are fundamentally about instilling discipline at this unprecedented scale. For the UK public, the prize is not just budget savings, but faster delivery of benefits, such as modernised hospitals, green energy capacity, better transport links, and digital services, all delivered when and how they were promised. The £1 trillion GMPP is a colossal challenge, but with stronger governance now in place, it can also be seen as a trillion-pound opportunity to renew Britain’s infrastructure with greater confidence.

Kaleido’s Role in a Transforming Landscape

As these sweeping changes take hold, Kaleido has been at the forefront of helping organisations adapt and excel in the new landscape. Over the years, we have applied our expertise in early-stage cost estimation and risk analysis to support the feasibility and planning phases that are now rightly in focus. Ensuring that initial budgets are grounded in robust data and scenario analysis rather than wishful thinking. We have developed readiness frameworks that assess the quality and completeness of underlying project strategy, such as effectively gauging how “ready” an estimate is to face real-world conditions. By identifying gaps or overly optimistic assumptions up front, and validating Quantitative Risk Analysis (QRA) with Qualitative assessments, we enable project teams to shore up their estimates and set appropriate contingencies. This kind of rigorous front-end scrutiny directly supports the Treasury’s mandate for realistic feasibility studies and incremental funding: our frameworks help determine when a project is truly prepared to move through its stage gates.

Beyond planning, Kaleido contributes to programme design and delivery in alignment with the new governance standards. We assist in crafting comprehensive strategic advice for complex programmes, mapping out clear objectives, delivery models, and decision structures from day one. Our team has provided assurance services on nationally significant programmes, performing independent cost estimates (ICE), “should-cost” analyses, and verification and validation (V&V) of project estimates and plans to give sponsors confidence that proposals will hold water. In the era of fixed funding envelopes, this independent scrutiny is more critical than ever, and Kaleido’s impartial assessments help stakeholders decide whether a project can meet its goals within the set budget and timeline. We also advise on establishing staged-funding governance, defining what criteria (in terms of design maturity, risk reduction, etc.) should trigger the release of funds at each phase. In doing so, we bridge the gap between high-level policy and on-the-ground practice, translating the new rules into workable processes for project teams.

A signature element of Kaleido’s approach is leveraging digital transformation and practical tools to enhance project delivery. Over the past year, we have focused on building digital capabilities that support change and transformation leadership, helping organisations adopt new tools and ways of working. This has included guiding teams through Digital PMO implementations, introducing integrated project management software, dashboards, and automations with AI that improve visibility and decision-making. By concentrating on adoption and behaviour change as much as the technology itself, Kaleido ensures that digital solutions are embedded effectively into everyday delivery. Our Decision Intelligence ethos – blending evidence, structured analysis, and human judgment – means we help clients raise their project delivery capability ceiling, an invaluable asset when oversight bodies like NISTA are looking for solid data and evidence of control.

In short, Kaleido’s first year has been dedicated to enabling these very reforms by making sure early estimates are credible, risks are quantified, programmes are well-structured, and modern technology is harnessed for better outcomes. This thought-leadership stance, paired with practical solutions, has started to make an impact. We have seen project teams become more confident in their decisions, knowing they rest on firmer analytical ground. And we’ve seen how a culture of clarity and proactivity can transform project trajectories. Kaleido is proud to be a part of this evolving ecosystem, championing the value of insight-driven planning and execution for capital projects.

Conclusion: Embracing the New Normal in Major Projects

As we mark Kaleido’s one-year anniversary, the evolution in UK infrastructure governance over the last year stands as a testament to lessons learned and the promise of doing things better. The endorsement of longer feasibility phases, adoption of OVfM’s recommendations, launch of a 10-year strategy, and recognition of the vast project portfolio all signal a new normal for major projects. One that prizes diligence, accountability, and long-term thinking. These changes will not fix every problem overnight, as mega-projects by nature remain high-risk and complex endeavours. However, they have started to remove longstanding obstacles that often made success elusive. The conversation around infrastructure is now less about lamenting overruns and more about how to deliver results differently.

For Kaleido, this shifting landscape validates our founding vision: that empowering decision-makers with better information, at the right time, with intelligent technology is key to transforming project outcomes. In the past year, we’ve demonstrated how early risk analysis, structured programme design, and AI-enhanced tools can translate lofty reforms into tangible improvements on the ground. Looking ahead, we remain committed to partnering across government and industry to sustain this momentum. The coming years will test how well these reforms hold up and Kaleido intends to stay at the forefront of that learning curve. Our first year has shown that even a small, agile team with the right approach can influence big changes. As the UK’s infrastructure ambitions grow, Kaleido will continue to provide the clarity, creativity, and the Decision Intelligence needed to turn those ambitions into reality. Here’s to the year ahead.

Written with the assistance of Generative AI

References

[1] Kaleido Blog (2024)

" Why Decision Intelligence is Critical for Today’s Projects”. Kaleido Projects – CEO blog post introducing DI for project

[2] HM Treasury (OVfM) – Value for Money Study on Mega-Project Governance (June 2025)

“Governance and budgeting arrangements for mega projects”. HM Treasury Office for Value for Money study report summarising five key changes for mega-project management

[3] House of Commons Public Accounts Committee (Sept 2025)

“Governance and decision-making on major projects”. Parliamentary report examining HM Treasury’s new approach to major and mega-projects, including endorsement of OVfM recommendations and the 10-Year Infrastructure Strategy

[4] HM Treasury & NISTA – UK Infrastructure Strategy (June 2025)

“UK Infrastructure: A 10 Year Strategy”. Cross-government policy paper outlining a decade-long infrastructure plan, backed by £725bn funding, and detailing the creation of NISTA and a long-term project pipeline

[5] National Infrastructure and Service Transformation Authority (Aug 2025)

"NISTA Annual Report 2024-25”. Annual report on the Government Major Projects Portfolio, with data on 213 projects (£996bn total cost) and discussion of reforms, pipeline (780 projects), and improved assurance under NISTA